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Ermita-Manila Hotel and Motel Operators, Inc. vs.

City Mayor
of Manila, L-24693, July 31, 1967
FACTS:
Petitioners assailed the constitutionality of Manila Ordinance
No. 4760 regulating the operation of hotels, motels and
lodging houses on the ground that it is unreasonable and
hence violative to the due process clause, wherein it requires
establishments to provide guest registration forms on the
lobby open for public view at all times.
Respondent City Mayor contends that the challenged
ordinance was a valid and proper exercise of police power
measure for the proper purpose of curbing immorality. An
explanatory note for the challenged ordinance made mention
of the alarming increase in the rate of prostitution, adultery
and fornication in Manila traceable in great part to the
existence of motels and the like.
ISSUE:
Whether or not Ordinance No. 4760 is violative of the due
process clause.
HELD:
No, the challenged ordinance as an exercise of police power
was precisely enacted to minimize certain practices hurtful to
public morals. As a due process requirement, an ordinance
must not outrun the bounds of reason and result in sheer
oppression for it to be valid. Thus it would be unreasonable to
stigmatize an ordinance enacted precisely for the well-being
of the people, specially if there is no factual foundation being
laid to prove its alleged violation of due process and offset the
ordinances presumed validity.

Joseph Estrada vs. Sandiganbayan, G.R. No. 148560, Nov.


19, 2001
Facts: Petitioner Joseph Ejercito Estrada, the highest-ranking
official to be prosecuted under RA 7080 (An Act Defining and
Penalizing the Crime of Plunder), 1 as amended by RA 7659, 2
wishes to impress upon us that the assailed law is so
defectively fashioned that it crosses that thin but distinct line
which divides the valid from the constitutionally infirm. He
therefore makes a stringent call for this Court to subject the
Plunder Law to the crucible of constitutionality mainly
because, according to him, (a) it suffers from the vice of
vagueness; (b) it dispenses with the "reasonable doubt"
standard in criminal prosecutions; and, (c) it abolishes the
element of mens rea in crimes already punishable under The
Revised Penal Code, all of which are purportedly clear
violations of the fundamental rights of the accused to due
process and to be informed of the nature and cause of the
accusation against him.
That during the period from June, 1998 to January 2001, in
the Philippines, and within the jurisdiction of this Honorable
Court, accused Joseph Ejercito Estrada, THE PRESIDENT OF
THE REPUBLIC OF THE PHILIPPINES, by himself AND/OR in
CONNIVANCE/CONSPIRACY with his co-accused, WHO ARE
MEMBERS OF HIS FAMILY, RELATIVES BY AFFINITY OR
CONSANGUINITY, BUSINESS ASSOCIATES, SUBORDINATES
AND/OR OTHER PERSONS, BY TAKING UNDUE ADVANTAGE OF
HIS
OFFICIAL
POSITION,
AUTHORITY,
RELATIONSHIP,
CONNECTION, OR INFLUENCE, did then and there willfully,
unlawfully and criminally amass, accumulate and acquire BY
HIMSELF DIRECTLY OR INDIRECTLY, ill-gotten wealth in the
aggregate amount or TOTAL VALUE of FOUR BILLION NINETY
SEVEN MILLION EIGHT HUNDRED FOUR THOUSAND ONE
HUNDRED SEVENTY THREE AND SEVENTEEN CENTAVOS
(P4,097,804,173.17), more or less, THEREBY UNJUSTLY
ENRICHING HIMSELF OR THEMSELVES AT THE EXPENSE AND
TO THE DAMAGE OF THE FILIPINO PEOPLE AND THE REPUBLIC
OF PHILIPPINES through ANY OR A combination OR A series of
overt OR criminal acts, OR SIMILAR SCHEMES OR MEANS.
RESPECTIVELY OR A TOTAL OF MORE OR LESS ONE BILLION
EIGHT HUNDRED FORTY SEVEN MILLION FIVE HUNDRED
SEVENTY EIGHT THOUSAND FIFTY SEVEN PESOS AND FIFTY
CENTAVOS (P1,847,578,057.50); AND BY COLLECTING OR
RECEIVING, DIRECTLY OR INDIRECTLY, BY HIMSELF AND/OR IN
CONNIVANCE WITH JOHN DOES JANE DOES, COMMISSIONS OR
PERCENTAGES BY REASON OF SAID PURCHASES OF SHARES
OF STOCK IN THE AMOUNT OF ONE HUNDRED EIGHTY NINE
MILLION
SEVEN
HUNDRED
THOUSAND
PESOS
(P189,700,000.00) MORE OR LESS, FROM THE BELLE
CORPORATION WHICH BECAME PART OF THE DEPOSIT IN THE
EQUITABLE BANK UNDER THE ACCOUNT NAME 'JOSE
VELARDE'
Issue: R.A. No. 7080 is unconstitutional on the following
grounds:
I.
IT VIOLATES THE DUE PROCESS CLAUSE FOR ITS
VAGUENESS
II.
IT VIOLATES THE CONSTITUTIONAL RIGHT OF THE
ACCUSED TO KNOW THE NATURE AND CAUSE OF THE
ACCUSATION AGAINST HIM

III.
IT VIOLATES THE DUE PROCESS CLAUSE AND THE
CONSTITUTIONAL
PRESUMPTION
OF
INNOCENCE
BY
LOWERING THE QUANTUM OF EVIDENCE NECESSARY FOR
PROVING THE COMPONENT ELEMENTS OF PLUNDER

achieve the aforesaid common goal. In the alternative, if there


is no such overall scheme or where the schemes or methods
used by multiple accused vary, the overt or criminal acts must
form part of a conspiracy to attain a common goal.

IV.
IT IS BEYOND THE CONSTITUTIONAL POWER OF THE
LEGISLATURE TO DELIMIT THE REASONABLE DOUBT
STANDARD AND TO ABOLISH THE ELEMENT OF MENS REA IN
MALA IN SE CRIMES BY CONVERTING THESE TO MALA
PROHIBITA, IN VIOLATION OF THE DUE PROCESS CONCEPT OF
CRIMINAL RESPONSIBILITY.

With more reason, the doctrine cannot be invoked where


the assailed statute is clear and free from ambiguity, as in this
case. The test in determining whether a criminal statute is
void for uncertainty is whether the language conveys a
sufficiently definite warning as to the proscribed conduct
when measured by common understanding and practice. It
must be stressed, however, that the "vagueness" doctrine
merely requires a reasonable degree of certainty for the
statute to be upheld not absolute precision or mathematical
exactitude, as petitioner seems to suggest.

Held: PREMISES CONSIDERED, this Court holds that RA 7080


otherwise known as the Plunder Law, as amended by RA
7659, is CONSTITUTIONAL. Consequently, the petition to
declare the law unconstitutional is DISMISSED for lack of
merit. SO ORDERED.

Hence, it cannot plausibly be contended that the law does


not give a fair warning and sufficient notice of what it seeks to
penalize. Under the circumstances, petitioner's reliance on the
"void-for-vagueness" doctrine is manifestly misplaced. The
doctrine has been formulated in various ways, but is most
commonly stated to the effect that a statute establishing a
criminal offense must define the offense with sufficient
definiteness that persons of ordinary intelligence can
understand what conduct is prohibited by the statute.

Ratio:
In view of vagueness and ambiguity
Congress is not restricted in the form of expression of its
will, and its inability to so define the words employed in a
statute will not necessarily result in the vagueness or
ambiguity of the law so long as the legislative will is clear, or
at least, can be gathered from the whole act, which is
distinctly expressed in the Plunder Law. Moreover, it is a wellsettled principle of legal hermeneutics that words of a statute
will be interpreted in their natural, plain and ordinary
acceptation and signification, 7 unless it is evident that the
legislature intended a technical or special legal meaning to
those words 8 The intention of the lawmakers who are,
ordinarily, untrained philologists and lexicographers to use
statutory phraseology in such a manner is always presumed.
Thus, Webster's New Collegiate Dictionary contains the
following commonly accepted definition of the words
"combination" and "series:"
Combination the result or product of combining; the act
or process of combining. To combine is to bring into such close
relationship as to obscure individual characters.
Series a number of things or events of the same class
coming one after another in spatial and temporal succession.
Verily, had the legislature intended a technical or
distinctive meaning for "combination" and "series," it would
have taken greater pains in specifically providing for it in the
law. As for "pattern," we agree with the observations of the
Sandiganbayan 9 that this term is sufficiently defined in Sec.
4, in relation to Sec. 1, par. (d), and Sec. 2. . . under Sec. 1 (d)
of the law, a 'pattern' consists of at least a combination or
series of overt or criminal acts enumerated in subsections (1)
to (6) of Sec. 1 (d). Secondly, pursuant to Sec. 2 of the law,
the pattern of overt or criminal acts is directed towards a
common purpose or goal which is to enable the public officer
to amass, accumulate or acquire ill-gotten wealth. And thirdly,
there must either be an 'overall unlawful scheme' or
'conspiracy' to achieve said common goal. As commonly
understood, the term 'overall unlawful scheme' indicates a
'general plan of action or method' which the principal accused
and public officer and others conniving with him, follow to

In view of due process


On the second issue, petitioner advances the highly
stretched theory that Sec. 4 of the Plunder Law circumvents
the immutable obligation of the prosecution to prove beyond
reasonable doubt the predicate acts constituting the crime of
plunder when it requires only proof of a pattern of overt or
criminal acts showing unlawful scheme or conspiracy. The
running fault in this reasoning is obvious even to the simplistic
mind. In a criminal prosecution for plunder, as in all other
crimes, the accused always has in his favor the presumption
of innocence which is guaranteed by the Bill of Rights, and
unless the State succeeds in demonstrating by proof beyond
reasonable doubt that culpability lies, the accused is entitled
to an acquittal.
What the prosecution needs to prove beyond reasonable
doubt is only a number of acts sufficient to form a
combination or series which would constitute a pattern and
involving an amount of at least P50,000,000.00. There is no
need to prove each and every other act alleged in the
Information to have been committed by the accused in
furtherance of the overall unlawful scheme or conspiracy to
amass, accumulate or acquire ill- gotten wealth.
In view of mens rea
As regards the third issue, again we agree with Justice
Mendoza that plunder is a malum in se which requires proof of
criminal intent. Thus, he says, in his Concurring Opinion . . .
Precisely because the constitutive crimes are mala in se the
element of mens rea must be proven in a prosecution for
plunder. It is noteworthy that the amended information
alleges that the crime of plunder was committed "willfully,
unlawfully and criminally." It thus alleges guilty knowledge on
the part of petitioner.
[With the government] terribly lacking the money to
provide even the most basic services to its people, any form
of misappropriation or misapplication of government funds
translates to an actual threat to the very existence of

government, and in turn, the very survival of the people it


governs over. Viewed in this context, no less heinous are the
effect and repercussions of crimes like qualified bribery,
destructive arson resulting in death, and drug offenses
involving government official, employees or officers, that their
perpetrators must not be allowed to cause further destruction
and damage to society. Indeed, it would be absurd to treat
prosecutions for plunder as though they are mere
prosecutions for violations of the Bouncing Check Law (B.P.
Blg. 22) or of an ordinance against jaywalking, without regard
to the inherent wrongness of the acts.

Racketeer Influenced and Corrupt Organizations Act is a


United States federal law that provides for extended criminal
penalties and a civil cause of action for acts performed as part
of an ongoing criminal organization. RICO was enacted by
section 901(a) of the Organized Crime Control Act of 1970
(Pub.L. 91-452, 84 Stat. 922, enacted October 15, 1970). RICO
is codified as Chapter 96 of Title 18 of the United States Code,
18 U.S.C. 19611968. While its intended use was to
prosecute the Mafia as well as others who were actively
engaged in organized crime, its application has been more
widespread.

To clinch, petitioner likewise assails the validity of RA 7659,


the amendatory law of RA 7080, on constitutional grounds.
Suffice it to say however that it is now too late in the day for
him to resurrect this long dead issue, the same having been
eternally consigned by People v. Echegaray 38 to the archives
of jurisprudential history. The declaration of this Court therein
that RA 7659 is constitutionally valid stands as a declaration
of the State, and becomes, by necessary effect, assimilated in
the Constitution now as an integral part of it.

In view of facial challenge

In view of presumption of innocence


At all events, let me stress that the power to construe law
is essentially judicial. To declare what the law shall be is a
legislative power, but to declare what the law is or has been is
judicial. Statutes enacted by Congress cannot be expected to
spell out with mathematical precision how the law should be
interpreted under any and all given situations. The application
of the law will depend on the facts and circumstances as
adduced by evidence which will then be considered, weighed
and evaluated by the courts. Indeed, it is the constitutionally
mandated function of the courts to interpret, construe and
apply the law as would give flesh and blood to the true
meaning of legislative enactments.
A construction should be rejected if it gives to the
language used in a statute a meaning that does not
accomplish the purpose for which the statute was enacted
and that tends to defeat the ends that are sought to be
attained by its enactment. Viewed broadly, "plunder involves
not just plain thievery but economic depredation which affects
not just private parties or personal interests but the nation as
a whole." Invariably, plunder partakes of the nature of "a
crime against national interest which must be stopped, and if
possible, stopped permanently."
In view of estoppel
Petitioner is not estopped from questioning the
constitutionality of R.A. No. 7080. The case at bar has been
subject to controversy principally due to the personalities
involved herein. The fact that one of petitioner's counsels was
a co-sponsor of the Plunder Law and petitioner himself voted
for its passage when he was still a Senator would not in any
put him in estoppel to question its constitutionality. The rule
on estoppel applies to questions of fact, not of law. Moreover,
estoppel should be resorted to only as a means of preventing
injustice. To hold that petitioner is estopped from questioning
the validity of R.A. No. 7080 because he had earlier voted for
its passage would result in injustice not only to him, but to all
others who may be held liable under this statute.
What is RICO

A facial challenge is allowed to be made to a vague statute


and to one which is overbroad because of possible "chilling
effect" upon protected speech. The theory is that "[w]hen
statutes regulate or proscribe speech and no readily apparent
construction suggests itself as a vehicle for rehabilitating the
statutes in a single prosecution, the transcendent value to all
society of constitutionally protected expression is deemed to
justify allowing attacks on overly broad statutes with no
requirement that the person making the attack demonstrate
that his own conduct could not be regulated by a statute
drawn with narrow specificity.'
This rationale does not apply to penal statutes. Criminal
statutes have general in terrorem effect resulting from their
very existence, and, if facial challenge is allowed for this
reason alone, the State may well be prevented from enacting
laws against socially harmful conduct. In the area of criminal
law, the law cannot take chances as in the area of free
speech.
In view of burden
PANGANIBAN, J.

of

proof

(accused)

according

to

In sum, the law must be proven to be clearly and


unequivocally repugnant to the Constitution before this Court
may declare its unconstitutionality. To strike down the law,
there must be a clear showing that what the fundamental law
prohibits, the statute allows to be done. 40 To justify the
nullification of the law, there must be a clear, unequivocal
breach of the Constitution; not a doubtful, argumentative
implication. 41 Of some terms in the law which are easily
clarified by judicial construction, petitioner has, at best,
managed merely to point out alleged ambiguities. Far from
establishing, by clear and unmistakable terms, any patent and
glaring conflict with the Constitution, the constitutional
challenge to the Anti-Plunder law must fail. For just as the
accused is entitled to the presumption of innocence in the
absence of proof beyond reasonable doubt, so must a law be
accorded the presumption of constitutionality without the
same requisite quantum of proof.
Petitioner now concludes that the Anti-Plunder Law
"eliminates proof of each and every component criminal act of
plunder by the accused and limits itself to establishing just
the pattern of over or criminal acts indicative of unlawful
scheme or conspiracy."

All told, the above explanation is in consonance with what


is often perceived to be the reality with respect to the crime of
plunder that "the actual extent of the crime may not, in its
breadth and entirety, be discovered, by reason of the 'stealth
and secrecy' in which it is committed and the involvement of
'so many persons here and abroad and [the fact that it]
touches so many states and territorial units."'
"The constitutionality of laws is presumed. To justify
nullification of a law, there must be a clear and unequivocal
breach of the Constitution, not a doubtful or argumentative
implication; a law shall not be declared invalid unless the
conflict with the Constitution is clear beyond a reasonable
doubt.
'The
presumption
is
always
in
favor
of
constitutionality . . . To doubt is to sustain.'
In view of burden of proof (State) according to KAPUNAN, J.
The Constitution guarantees both substantive and
procedural due process as well as the right of the accused to
be informed of the nature and cause of the accusation against
him. A criminal statute should not be so vague and uncertain
that "men of common intelligence must necessarily guess as
to its meaning and differ as to its application. There are three
distinct considerations for the vagueness doctrine. First, the
doctrine is designed to ensure that individuals are properly
warned ex ante of the criminal consequences of their conduct.
This "fair notice" rationale was articulated in United States v.
Harriss: The constitutional requirement of definiteness is
violated by a criminal statute that fails to give a person of
ordinary intelligence fair notice that his contemplated conduct
is forbidden by the statute. The underlying principle is that no
man shall be held criminally responsible for conduct which he
could not reasonably understand to be proscribed.
While the dictum that laws be clear and definite does not
require Congress to spell out with mathematical certainty the
standards to which an individual must conform his conduct, it
is necessary that statutes provide reasonable standards to
guide prospective conduct. And where a statute imposes
criminal sanctions, the standard of certainty is higher. The
penalty imposable on the person found guilty of violating R.A.
No. 7080 is reclusion perpetua to death. Given such penalty,
the standard of clarity and definiteness required of R.A. No.
7080 is unarguably higher than that of other laws.
It has been incorrectly suggested that petitioner cannot
mount a "facial challenge" to the Plunder Law, and that
"facial" or "on its face" challenges seek the total invalidation
of a statute. Fr. Bernas, for his part, pointed to several
problematical portions of the law that were left unclarified. He
posed the question: "How can you have a 'series' of criminal
acts if the elements that are supposed to constitute the series
are not proved to be criminal?" The meanings of
"combination" and "series" as used in R.A. No. 7080 are not
clear.
To quote Fr. Bernas again: "How can you have a 'series' of
criminal acts if the elements that are supposed to constitute
the series are not proved to be criminal?" Because of this, it is
easier to convict for plunder and sentence the accused to
death than to convict him for each of the component crimes
otherwise punishable under the Revised Penal Code and other
laws which are bailable offenses. The resultant absurdity
strikes at the very heart if the constitutional guarantees of
due process and equal protection.

The component acts constituting plunder, a heinous crime,


being inherently wrongful and immoral, are patently mala in
se, even if punished by a special law and accordingly, criminal
intent must clearly be established together with the other
elements of the crime; otherwise, no crime is committed. By
eliminating mens rea, R.A. 7080 does not require the
prosecution to prove beyond reasonable doubt the component
acts constituting plunder and imposes a lesser burden of proof
on the prosecution, thus paying the way for the imposition of
the penalty of reclusion perpetua to death on the accused, in
plain violation of the due process and equal protection clauses
of the Constitution.
It obfuscates the mind to ponder that such an ambiguous
law as R.A. No. 7080 would put on the balance the life and
liberty of the accused against whom all the resources of the
State are arrayed. It could be used as a tool against political
enemies and a weapon of hate and revenge by whoever
wields the levers of power.
In view of due process according to YNARES-SANTIAGO, J.
It is an ancient maxim in law that in times of frenzy and
excitement, when the desire to do justice is tarnished by
anger and vengeance, there is always the danger that vital
protections accorded an accused may be taken away.
Substantive due process dictates that there should be no
arbitrariness, unreasonableness or ambiguity in any law which
deprives a person of his life or liberty. The trial and other
procedures leading to conviction may be fair and proper. But if
the law itself is not reasonable legislation, due process is
violated. Thus, an accused may not be sentenced to suffer the
lethal injection or life imprisonment for an offense understood
only after judicial construction takes over where Congress left
off, and interpretation supplies its meaning.
The Constitution guarantees both substantive and
procedural due process as well as the right of the accused to
be informed of the nature and cause of the accusation against
him. Substantive due process requires that a criminal statute
should not be vague and uncertain. More explicitly That the
terms of a penal statute. . . must be sufficiently explicit to
inform those who are subject to it what conduct on their part
will render them liable to penalties, is a well-recognized
requirement, consonant alike with ordinary notions of fair play
and the settled rules of law. And a statute which either forbids
or requires the doing of an act in terms so vague that men of
common intelligence must necessarily guess at its meaning
and differ as to its application, violates the first essential of
due process.
In its early formulation, the overbreadth doctrine states
that a governmental purpose to control or prevent activities
constitutionally subject to regulation may not be achieved by
means which sweep unnecessarily broadly and thereby invade
the area of protected freedoms. 9
A statute, especially one involving criminal prosecution, must
be definite to be valid. A statute is vague or overbroad, in
violation of the due process clause, where its language does
not convey sufficiently definite warning to the average person
as to the prohibited conduct. A statute is unconstitutionally
vague if people of common intelligence must necessarily
guess at its meaning.

In malversation or bribery under the Revised Penal Code,


the criminal intent is an important element of the criminal
acts. Under the Plunder Law, it is enough that the acts are
committed. Equally disagreeable is the provision of the
Plunder Law which does away with the requirement that each
and every component of the criminal act of plunder be proved
and instead limits itself to proving only a pattern of overt acts
indicative of the unlawful scheme or conspiracy. 18 In effect,
the law seeks to penalize the accused only on the basis of a
proven scheme or conspiracy, and does away with the rights
of the accused insofar as the component crimes are
concerned. In other words, R.A. No. 7080 circumvents the
obligation of the prosecution to prove beyond reasonable
doubt every fact necessary to constitute the crime of plunder,
because the law requires merely proof of a pattern of overt
acts showing an unlawful scheme or conspiracy.
I agree with petitioner's concern over the danger that the
trial court may allow the specifications of details in an
information to validate a statute inherently void for
vagueness. An information cannot rise higher than the statute
upon which it is based. Not even the construction by the
Sandiganbayan of a vague or ambiguous provision can supply
the missing ingredients of the Plunder Law. The right of an
accused to be informed of the nature and cause of the
accusation against him is most often exemplified in the care
with which a complaint or information should be drafted.
However, the clarity and particularity required of an
information should also be present in the law upon which the
charges are based. If the penal law is vague, any particularity
in the information will come from the prosecutor. The
prosecution takes over the role of Congress.
In view of vagueness according to SANDOVAL-GUTIERREZ, J.
As a basic premise, we have to accept that even a person
accused of a crime possesses inviolable rights founded on the
Constitution which even the welfare of the society as a whole
cannot override. The rights guaranteed to him by the
Constitution are not subject to political bargaining or to the
calculus of social interest. Thus, no matter how sociallyrelevant the purpose of a law is, it must be nullified if it
tramples upon the basic rights of the accused.
When Section 4 of R.A. No. 7080 mandates that it shall not
be necessary for the prosecution to prove each and every
criminal act done by the accused, the legislature, in effect,
rendered the enumerated "criminal acts" under Section 1 (d)
merely as means and not as essential elements of plunder.
This is constitutionally infirmed and repugnant to the basic
idea of justice and fair play. As a matter of due process, the
prosecution is required to prove beyond reasonable doubt
every fact necessary to constitute the crime with which the
defendant is charged. The State may not specify a lesser
burden of proof for an element of a crime. 8 With more
reason, it should not be allowed to go around the principle by
characterizing an essential element of plunder merely as a
"means" of committing the crime. For the result is the
reduction of the burden of the prosecution to prove the guilt
of the accused beyond reasonable doubt.
In short, all that R.A. No. 7080 requires is that each Justice
must be convinced of the existence of a "combination or
series." As to which criminal acts constitute a combination or
series, the Justices need not be in full agreement. Surely, this
would cover-up a wide disagreement among them about just
what the accused actually did or did not do. Stated differently,

even if the Justices are not unified in their determination on


what criminal acts were actually committed by the accused,
which need not be proved under the law, still, they could
convict him of plunder.
The Special Prosecution Division Panel defines it as "at
least three of the acts enumerated under Section 1(d)
thereof." 33 But it can very well be interpreted as only one act
repeated at least three times. And the Office of the Solicitor
General, invoking the deliberations of the House of
Representatives, contends differently. It defines the term
series as a "repetition" or pertaining to "two or more."
A statute which is so vague as to permit the infliction of
capital punishment on acts already punished with lesser
penalties by clearly formulated law is unconstitutional. The
vagueness cannot be cured by judicial construction.

In fine, I can only stress that the one on trial here is not Mr.
Estrada, but R.A. No. 7080. The issue before this Court is not
the guilt or innocence of the accused, but the constitutionality
of the law. I vote to grant the petition, not because I favor Mr.
Estrada, but because I look beyond today and I see that this
law can pose a serious threat to the life, liberty and property
of anyone who may come under its unconstitutional
provisions. As a member of this Court, my duty is to see to it
that the law conforms to the Constitution and no other. I
simply cannot, in good conscience, fortify a law that is
patently unconstitutional.

Villegas vs. Hiu Chiong, 88 SCRA


250
This is a petition for certiorari to review tile decision dated
September 17, 1968 of respondent Judge Francisco Arca of the
Court of First Instance of Manila, Branch I, in Civil Case No.
72797, the dispositive portion of winch reads.
Wherefore, judgment is hereby rendered in favor of the
petitioner and against the respondents, declaring Ordinance
No. 6 37 of the City of Manila null and void. The preliminary
injunction is made permanent. No pronouncement as to cost.
SO ORDERED.

Manila, Philippines, September 17, 1968.


(SGD.) FRANCISCO ARCA
Judge 1
The controverted Ordinance No. 6537 was passed by the
Municipal Board of Manila on February 22, 1968 and signed by
the herein petitioner Mayor Antonio J. Villegas of Manila on
March 27, 1968. 2

1)
As a revenue measure imposed on aliens employed
in the City of Manila, Ordinance No. 6537 is discriminatory and
violative of the rule of the uniformity in taxation;

2)
As a police power measure, it makes no distinction
between useful and non-useful occupations, imposing a fixed
P50.00 employment permit, which is out of proportion to the
cost of registration and that it fails to prescribe any standard
to guide and/or limit the action of the Mayor, thus, violating
the fundamental principle on illegal delegation of legislative
powers:
3)
It is arbitrary, oppressive and unreasonable, being
applied only to aliens who are thus, deprived of their rights to
life, liberty and property and therefore, violates the due
process and equal protection clauses of the Constitution. 7
On May 24, 1968, respondent Judge issued the writ of
preliminary injunction and on September 17, 1968 rendered
judgment declaring Ordinance No. 6537 null and void and
making permanent the writ of preliminary injunction. 8
Contesting the aforecited decision of respondent Judge, then
Mayor Antonio J. Villegas filed the present petition on March
27, 1969. Petitioner assigned the following as errors allegedly
committed by respondent Judge in the latter's decision of
September 17,1968: 9

City Ordinance No. 6537 is entitled:


I
AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT
A CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN ANY
PLACE OF EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF
TRADE, BUSINESS OR OCCUPATION WITHIN THE CITY OF
MANILA WITHOUT FIRST SECURING AN EMPLOYMENT PERMIT
FROM THE MAYOR OF MANILA; AND FOR OTHER PURPOSES. 3
Section 1 of said Ordinance No. 6537 4 prohibits aliens from
being employed or to engage or participate in any position or
occupation or business enumerated therein, whether
permanent, temporary or casual, without first securing an
employment permit from the Mayor of Manila and paying the
permit fee of P50.00 except persons employed in the
diplomatic or consular missions of foreign countries, or in the
technical assistance programs of both the Philippine
Government and any foreign government, and those working
in their respective households, and members of religious
orders or congregations, sect or denomination, who are not
paid monetarily or in kind.
Violations of this ordinance is punishable by an imprisonment
of not less than three (3) months to six (6) months or fine of
not less than P100.00 but not more than P200.00 or both such
fine and imprisonment, upon conviction. 5
On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho
who was employed in Manila, filed a petition with the Court of
First Instance of Manila, Branch I, denominated as Civil Case
No. 72797, praying for the issuance of the writ of preliminary
injunction and restraining order to stop the enforcement of
Ordinance No. 6537 as well as for a judgment declaring said
Ordinance No. 6537 null and void. 6
In this petition, Hiu Chiong Tsai Pao Ho assigned the following
as his grounds for wanting the ordinance declared null and
void:

THE RESPONDENT JUDGE COMMITTED A SERIOUS AND PATENT


ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537
VIOLATED THE CARDINAL RULE OF UNIFORMITY OF TAXATION.
II
RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND
PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE PRINCIPLE AGAINST UNDUE DESIGNATION
OF LEGISLATIVE POWER.
III
RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND
PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE DUE PROCESS AND EQUAL PROTECTION
CLAUSES OF THE CONSTITUTION.
Petitioner Mayor Villegas argues that Ordinance No. 6537
cannot be declared null and void on the ground that it violated
the rule on uniformity of taxation because the rule on
uniformity of taxation applies only to purely tax or revenue
measures and that Ordinance No. 6537 is not a tax or revenue
measure but is an exercise of the police power of the state, it
being principally a regulatory measure in nature.
The contention that Ordinance No. 6537 is not a purely tax or
revenue measure because its principal purpose is regulatory
in nature has no merit. While it is true that the first part which
requires that the alien shall secure an employment permit
from the Mayor involves the exercise of discretion and
judgment in the processing and approval or disapproval of
applications for employment permits and therefore is
regulatory in character the second part which requires the
payment of P50.00 as employee's fee is not regulatory but a
revenue measure. There is no logic or justification in exacting

P50.00 from aliens who have been cleared for employment. It


is obvious that the purpose of the ordinance is to raise money
under the guise of regulation.
The P50.00 fee is unreasonable not only because it is
excessive but because it fails to consider valid substantial
differences in situation among individual aliens who are
required to pay it. Although the equal protection clause of the
Constitution does not forbid classification, it is imperative that
the classification should be based on real and substantial
differences having a reasonable relation to the subject of the
particular legislation. The same amount of P50.00 is being
collected from every employed alien whether he is casual or
permanent, part time or full time or whether he is a lowly
employee or a highly paid executive
Ordinance No. 6537 does not lay down any criterion or
standard to guide the Mayor in the exercise of his discretion. It
has been held that where an ordinance of a municipality fails
to state any policy or to set up any standard to guide or limit
the mayor's action, expresses no purpose to be attained by
requiring a permit, enumerates no conditions for its grant or
refusal, and entirely lacks standard, thus conferring upon the
Mayor arbitrary and unrestricted power to grant or deny the
issuance of building permits, such ordinance is invalid, being
an undefined and unlimited delegation of power to allow or
prevent an activity per se lawful. 10
In Chinese Flour Importers Association vs. Price Stabilization
Board, 11 where a law granted a government agency power to
determine the allocation of wheat flour among importers, the
Supreme Court ruled against the interpretation of uncontrolled
power as it vested in the administrative officer an arbitrary
discretion to be exercised without a policy, rule, or standard
from which it can be measured or controlled.
It was also held in Primicias vs. Fugoso 12 that the authority
and discretion to grant and refuse permits of all classes
conferred upon the Mayor of Manila by the Revised Charter of
Manila is not uncontrolled discretion but legal discretion to be
exercised within the limits of the law.
Ordinance No. 6537 is void because it does not contain or
suggest any standard or criterion to guide the mayor in the
exercise of the power which has been granted to him by the
ordinance.
The ordinance in question violates the due process of law and
equal protection rule of the Constitution.
Requiring a person before he can be employed to get a permit
from the City Mayor of Manila who may withhold or refuse it at
will is tantamount to denying him the basic right of the people
in the Philippines to engage in a means of livelihood. While it
is true that the Philippines as a State is not obliged to admit
aliens within its territory, once an alien is admitted, he cannot
be deprived of life without due process of law. This guarantee
includes the means of livelihood. The shelter of protection
under the due process and equal protection clause is given to
all persons, both aliens and citizens. 13
The trial court did not commit the errors assigned.
WHEREFORE, the decision appealed from is hereby affirmed,
without pronouncement as to costs.
SO ORDERED.

FACTS:
This case involves an ordinance prohibiting aliens from being
employed or engage or participate in any position or
occupation or business enumerated therein, whether
permanent, temporary or casual, without first securing an
employment permit from the Mayor of Manila and paying the
permit fee of P50.00. Private respondent Hiu Chiong Tsai Pao
Ho who was employed in Manila, filed a petition to stop the
enforcement of such ordinance as well as to declare the same
null and void. Trial court rendered judgment in favor of the
petitioner, hence this case.

ISSUE:
WON said Ordinance violates due process of law and equal
protection rule of the Constitution.

HELD:
Yes. The Ordinance The ordinance in question violates the
due process of law and equal protection rule of the
Constitution. Requiring a person before he can be employed
to get a permit from the City Mayor who may withhold or
refuse it at his will is tantamount to denying him the basic
right of the people in the Philippines to engage in a means of
livelihood. While it is true that the Philippines as a State is not
obliged to admit aliens within its territory, once an alien is
admitted, he cannot be deprived of life without due process of
law. This guarantee includes the means of livelihood. The
shelter of protection under the due process and equal
protection clause is given to all persons, both aliens and
citizens.

Smith Bell & Co. vs. Natividad, 40


Phil 136
A writ of mandamus is prayed for by Smith, Bell & Co. (Ltd.),
against Joaquin Natividad, Collector of Customs of the port of
Cebu, Philippine Islands, to compel him to issue a certificate
of Philippine registry to the petitioner for its motor vessel
Bato. The Attorney-General, acting as counsel for respondent,
demurs to the petition on the general ground that it does not
state facts sufficient to constitute a cause of action. While the
facts are thus admitted, and while, moreover, the pertinent
provisions of law are clear and understandable, and
interpretative American jurisprudence is found in abundance,
yet the issue submitted is not lightly to be resolved. The
question, flatly presented, is, whether Act. No. 2761 of the
Philippine Legislature is valid or, more directly stated,
whether the Government of the Philippine Islands, through its
Legislature, can deny the registry of vessels in its coastwise
trade to corporations having alien stockholders.

FACTS.
Smith, Bell & Co., (Ltd.), is a corporation organized and
existing under the laws of the Philippine Islands. A majority of
its stockholders are British subjects. It is the owner of a motor
vessel known as the Bato built for it in the Philippine Islands in
1916, of more than fifteen tons gross The Bato was brought to
Cebu in the present year for the purpose of transporting
plaintiff's merchandise between ports in the Islands.
Application was made at Cebu, the home port of the vessel, to
the Collector of Customs for a certificate of Philippine registry.
The Collector refused to issue the certificate, giving as his
reason that all the stockholders of Smith, Bell & Co., Ltd., were
not citizens either of the United States or of the Philippine
Islands. The instant action is the result.
LAW.
The Act of Congress of April 29, 1908, repealing the Shipping
Act of April 30, 1906 but reenacting a portion of section 3 of
this Law, and still in force, provides in its section 1:
That until Congress shall have authorized the registry as
vessels of the United States of vessels owned in the Philippine
Islands, the Government of the Philippine Islands is hereby
authorized to adopt, from time to time, and enforce
regulations governing the transportation of merchandise and
passengers between ports or places in the Philippine
Archipelago. (35 Stat. at L., 70; Section 3912, U. S. Comp Stat.
[1916]; 7 Pub. Laws, 364.)
The Act of Congress of August 29, 1916, commonly known as
the Jones Law, still in force, provides in section 3, (first
paragraph, first sentence), 6, 7, 8, 10, and 31, as follows.
SEC. 3. That no law shall be enacted in said Islands which
shall deprive any person of life, liberty, or property without
due process of law, or deny to any person therein the equal
protection of the laws. . . .
SEC. 6. That the laws now in force in the Philippines shall
continue in force and effect, except as altered, amended, or
modified herein, until altered, amended, or repealed by the

legislative authority herein provided or by Act of Congress of


the United States.
SEC. 7. That the legislative authority herein provided shall
have power, when not inconsistent with this Act, by due
enactment to amend, alter modify, or repeal any law, civil or
criminal, continued in force by this Act as it may from time to
time see fit
This power shall specifically extend with the limitation herein
provided as to the tariff to all laws relating to revenue
provided as to the tariff to all laws relating to revenue and
taxation in effect in the Philippines.
SEC. 8. That general legislative power, except as otherwise
herein provided, is hereby granted to the Philippine
Legislature, authorized by this Act.
SEC. 10. That while this Act provides that the Philippine
government shall have the authority to enact a tariff law the
trade relations between the islands and the United States
shall continue to be governed exclusively by laws of the
Congress of the United States: Provided, That tariff acts or
acts amendatory to the tariff of the Philippine Islands shall not
become law until they shall receive the approval of the
President of the United States, nor shall any act of the
Philippine Legislature affecting immigration or the currency or
coinage laws of the Philippines become a law until it has been
approved by the President of the United States: Provided
further, That the President shall approve or disapprove any
act mentioned in the foregoing proviso within six months from
and after its enactment and submission for his approval, and
if not disapproved within such time it shall become a law the
same as if it had been specifically approved.
SEC. 31. That all laws or parts of laws applicable to the
Philippines not in conflict with any of the provisions of this Act
are hereby continued in force and effect." (39 Stat at L., 546.)
On February 23, 1918, the Philippine Legislature enacted Act
No. 2761. The first section of this law amended section 1172
of the Administrative Code to read as follows:
SEC. 1172.
Certificate of Philippine register. Upon
registration of a vessel of domestic ownership, and of more
than fifteen tons gross, a certificate of Philippine register shall
be issued for it. If the vessel is of domestic ownership and of
fifteen tons gross or less, the taking of the certificate of
Philippine register shall be optional with the owner.
"Domestic ownership," as used in this section, means
ownership vested in some one or more of the following
classes of persons: (a) Citizens or native inhabitants of the
Philippine Islands; (b) citizens of the United States residing in
the Philippine Islands; (c) any corporation or company
composed wholly of citizens of the Philippine Islands or of the
United States or of both, created under the laws of the United
States, or of any State thereof, or of thereof, or the managing
agent or master of the vessel resides in the Philippine Islands
Any vessel of more than fifteen gross tons which on February
eighth, nineteen hundred and eighteen, had a certificate of
Philippine register under existing law, shall likewise be
deemed a vessel of domestic ownership so long as there shall
not be any change in the ownership thereof nor any transfer
of stock of the companies or corporations owning such vessel
to person not included under the last preceding paragraph.

Sections 2 and 3 of Act No. 2761 amended sections 1176 and


1202 of the Administrative Code to read as follows:
SEC. 1176. Investigation into character of vessel. No
application for a certificate of Philippine register shall be
approved until the collector of customs is satisfied from an
inspection of the vessel that it is engaged or destined to be
engaged in legitimate trade and that it is of domestic
ownership as such ownership is defined in section eleven
hundred and seventy-two of this Code.
The collector of customs may at any time inspect a vessel or
examine its owner, master, crew, or passengers in order to
ascertain whether the vessel is engaged in legitimate trade
and is entitled to have or retain the certificate of Philippine
register.
SEC. 1202. Limiting number of foreign officers and engineers
on board vessels. No Philippine vessel operating in the
coastwise trade or on the high seas shall be permitted to have
on board more than one master or one mate and one
engineer who are not citizens of the United States or of the
Philippine Islands, even if they hold licenses under section one
thousand one hundred and ninety-nine hereof. No other
person who is not a citizen of the United States or of the
Philippine Islands shall be an officer or a member of the crew
of such vessel. Any such vessel which fails to comply with the
terms of this section shall be required to pay an additional
tonnage tax of fifty centavos per net ton per month during the
continuance of said failure.

ISSUES.

Predicated on these facts and provisions of law, the issues as


above stated recur, namely, whether Act No 2761 of the
Philippine Legislature is valid in whole or in part whether
the Government of the Philippine Islands, through its
Legislature, can deny the registry of vessel in its coastwise
trade to corporations having alien stockholders .

OPINION.

1.
Considered from a positive standpoint, there can
exist no measure of doubt as to the power of the Philippine
Legislature to enact Act No. 2761. The Act of Congress of April
29, 1908, with its specific delegation of authority to the
Government of the Philippine Islands to regulate the
transportation of merchandise and passengers between ports
or places therein, the liberal construction given to the
provisions of the Philippine Bill, the Act of Congress of July 1,
1902, by the courts, and the grant by the Act of Congress of
August 29, 1916, of general legislative power to the Philippine
Legislature, are certainly superabundant authority for such a
law. While the Act of the local legislature may in a way be
inconsistent with the Act of Congress regulating the coasting
trade of the Continental United States, yet the general rule
that only such laws of the United States have force in the
Philippines as are expressly extended thereto, and the
abnegation of power by Congress in favor of the Philippine

Islands would leave no starting point for convincing argument.


As a matter of fact, counsel for petitioner does not assail
legislative action from this direction (See U. S. vs. Bull [1910],
15 Phil., 7; Sinnot vs. Davenport [1859] 22 How., 227.)
2.
It is from the negative, prohibitory standpoint that
counsel argues against the constitutionality of Act No. 2761.
The first paragraph of the Philippine Bill of Rights of the
Philippine Bill, repeated again in the first paragraph of the
Philippine Bill of Rights as set forth in the Jones Law, provides
"That no law shall be enacted in said Islands which shall
deprive any person of life, liberty, or property without due
process of law, or deny to any person therein the equal
protection of the laws." Counsel says that Act No. 2761 denies
to Smith, Bell & Co., Ltd., the equal protection of the laws
because it, in effect, prohibits the corporation from owning
vessels, and because classification of corporations based on
the citizenship of one or more of their stockholders is
capricious, and that Act No. 2761 deprives the corporation of
its properly without due process of law because by the
passage of the law company was automatically deprived of
every beneficial attribute of ownership in the Bato and left
with the naked title to a boat it could not use .
The guaranties extended by the Congress of the United States
to the Philippine Islands have been used in the same sense as
like provisions found in the United States Constitution. While
the "due process of law and equal protection of the laws"
clause of the Philippine Bill of Rights is couched in slightly
different words than the corresponding clause of the
Fourteenth Amendment to the United States Constitution, the
first should be interpreted and given the same force and
effect as the latter. (Kepner vs. U.S. [1904], 195 U. S., 100;
Sierra vs. Mortiga [1907], 204 U. S.,.470; U. S. vs. Bull [1910],
15 Phil., 7.) The meaning of the Fourteenth Amendment has
been announced in classic decisions of the United States
Supreme Court. Even at the expense of restating what is so
well known, these basic principles must again be set down in
order to serve as the basis of this decision.

The guaranties of the Fourteenth Amendment and so of the


first paragraph of the Philippine Bill of Rights, are universal in
their application to all person within the territorial jurisdiction,
without regard to any differences of race, color, or nationality.
The word "person" includes aliens. (Yick Wo vs. Hopkins
[1886], 118 U. S., 356; Truax vs. Raich [1915], 239 U. S., 33.)
Private corporations, likewise, are "persons" within the scope
of the guaranties in so far as their property is concerned.
(Santa Clara County vs. Southern Pac. R. R. Co. [1886], 118.U.
S., 394; Pembina Mining Co. vs. Pennsylvania [1888],.125 U.
S., 181 Covington & L. Turnpike Road Co. vs. Sandford [1896],
164 U. S., 578.) Classification with the end in view of providing
diversity of treatment may be made among corporations, but
must be based upon some reasonable ground and not be a
mere arbitrary selection (Gulf, Colorado & Santa Fe Railway
Co. vs. Ellis [1897],.165 U. S., 150.) Examples of laws held
unconstitutional because of unlawful discrimination against
aliens could be cited. Generally, these decisions relate to
statutes which had attempted arbitrarily to forbid aliens to
engage in ordinary kinds of business to earn their living.
(State vs. Montgomery [1900], 94 Maine, 192, peddling but
see. Commonwealth vs. Hana [1907], 195 Mass., 262; Templar
vs. Board of Examiners of Barbers [1902], 131 Mich., 254,
barbers; Yick Wo vs. Hopkins [1886], 118 U. S.,.356,
discrimination against Chinese; Truax vs. Raich [1915], 239 U.

S., 33; In re Parrott [1880], 1 Fed , 481; Fraser vs. McConway


& Torley Co. [1897], 82 Fed , 257; Juniata Limestone Co. vs.
Fagley [1898], 187 Penn., 193, all relating to the employment
of aliens by private corporations.)
A literal application of general principles to the facts before us
would, of course, cause the inevitable deduction that Act No.
2761 is unconstitutional by reason of its denial to a
corporation, some of whole members are foreigners, of the
equal protection of the laws. Like all beneficient propositions,
deeper research discloses provisos. Examples of a denial of
rights to aliens notwithstanding the provisions of the
Fourteenth Amendment could be cited. (Tragesser vs. Gray
[1890], 73 Md., 250, licenses to sell spirituous liquors denied
to persons not citizens of the United States; Commonwealth
vs. Hana [1907], 195 Mass , 262, excluding aliens from the
right to peddle; Patsone vs. Commonwealth of Pennsylvania
[1914], 232 U. S. , 138, prohibiting the killing of any wild bird
or animal by any unnaturalized foreign-born resident; Ex parte
Gilleti [1915], 70 Fla., 442, discriminating in favor of citizens
with reference to the taking for private use of the common
property in fish and oysters found in the public waters of the
State; Heim vs. McCall [1915], 239 U. S.,.175, and Crane vs.
New York [1915], 239 U. S., 195, limiting employment on
public works by, or for, the State or a municipality to citizens
of the United States.)
One of the exceptions to the general rule, most persistent and
far reaching in influence is, that neither the Fourteenth
Amendment to the United States Constitution, broad and
comprehensive as it is, nor any other amendment, "was
designed to interfere with the power of the State, sometimes
termed its `police power,' to prescribe regulations to promote
the health, peace, morals, education, and good order of the
people, and legislate so as to increase the industries of the
State, develop its resources and add to its wealth and
prosperity. From the very necessities of society, legislation of
a special character, having these objects in view, must often
be had in certain districts." (Barbier vs. Connolly [1884], 113
U.S., 27; New Orleans Gas Co. vs. Lousiana Light Co. [1885],
115 U.S., 650.) This is the same police power which the United
States Supreme Court say "extends to so dealing with the
conditions which exist in the state as to bring out of them the
greatest welfare in of its people." (Bacon vs. Walker [1907],
204 U.S., 311.) For quite similar reasons, none of the provision
of the Philippine Organic Law could could have had the effect
of denying to the Government of the Philippine Islands, acting
through its Legislature, the right to exercise that most
essential, insistent, and illimitable of powers, the sovereign
police power, in the promotion of the general welfare and the
public interest. (U. S. vs. Toribio [1910], 15 Phil., 85; Churchill
and Tait vs. Rafferty [1915], 32 Phil., 580; Rubi vs. Provincial
Board of Mindoro [1919], 39 Phil., 660.) Another notable
exception permits of the regulation or distribution of the
public domain or the common property or resources of the
people of the State, so that use may be limited to its citizens.
(Ex parte Gilleti [1915], 70 Fla., 442; McCready vs. Virginia
[1876], 94 U. S., 391; Patsone vs. Commonwealth of
Pennsylvania [1914], 232U. S., 138.) Still another exception
permits of the limitation of employment in the construction of
public works by, or for, the State or a municipality to citizens
of the United States or of the State. (Atkin vs. Kansas
[1903],191 U. S., 207; Heim vs. McCall [1915], 239 U.S., 175;
Crane vs. New York [1915], 239 U. S., 195.) Even as to
classification, it is admitted that a State may classify with
reference to the evil to be prevented; the question is a

practical one, dependent upon experience. (Patsone vs.


Commonwealth of Pennsylvania [1914], 232 U. S., 138.)
To justify that portion of Act no. 2761 which permits
corporations or companies to obtain a certificate of Philippine
registry only on condition that they be composed wholly of
citizens of the Philippine Islands or of the United States or
both, as not infringing Philippine Organic Law, it must be done
under some one of the exceptions here mentioned This must
be done, moreover, having particularly in mind what is so
often of controlling effect in this jurisdiction our local
experience and our peculiar local conditions.
To recall a few facts in geography, within the confines of
Philippine jurisdictional limits are found more than three
thousand islands. Literally, and absolutely, steamship lines
are, for an Insular territory thus situated, the arteries of
commerce. If one be severed, the life-blood of the nation is
lost. If on the other hand these arteries are protected, then
the security of the country and the promotion of the general
welfare is sustained. Time and again, with such conditions
confronting it, has the executive branch of the Government of
the Philippine Islands, always later with the sanction of the
judicial branch, taken a firm stand with reference to the
presence of undesirable foreigners. The Government has thus
assumed to act for the all-sufficient and primitive reason of
the benefit and protection of its own citizens and of the selfpreservation and integrity of its dominion. (In re Patterson
[1902], 1 Phil., 93; Forbes vs. Chuoco, Tiaco and Crossfield
[1910], 16 Phil., 534;.228 U.S., 549; In re McCulloch Dick
[1918], 38 Phil., 41.) Boats owned by foreigners, particularly
by such solid and reputable firms as the instant claimant,
might indeed traverse the waters of the Philippines for ages
without doing any particular harm. Again, some evilminded
foreigner might very easily take advantage of such lavish
hospitality to chart Philippine waters, to obtain valuable
information for unfriendly foreign powers, to stir up
insurrection, or to prejudice Filipino or American commerce.
Moreover, under the Spanish portion of Philippine law, the
waters within the domestic jurisdiction are deemed part of the
national domain, open to public use. (Book II, Tit. IV, Ch. I,
Civil Code; Spanish Law of Waters of August 3, 1866, arts 1, 2,
3.) Common carriers which in the Philippines as in the United
States and other countries are, as Lord Hale said, "affected
with a public interest," can only be permitted to use these
public waters as a privilege and under such conditions as to
the representatives of the people may seem wise. (See De
Villata vs. Stanley [1915], 32 Phil., 541.)
In Patsone vs. Commonwealth of Pennsylvania ([1913], 232
U.S., 138), a case herein before mentioned, Justice Holmes
delivering the opinion of the United States Supreme Court
said:
This statute makes it unlawful for any unnaturalized foreignborn resident to kill any wild bird or animal except in defense
of person or property, and `to that end' makes it unlawful for
such foreign-born person to own or be possessed of a shotgun
or rifle; with a penalty of $25 and a forfeiture of the gun or
guns. The plaintiff in error was found guilty and was
sentenced to pay the abovementioned fine. The judgment was
affirmed on successive appeals. (231 Pa., 46; 79 Atl., 928.) He
brings the case to this court on the ground that the statute is
contrary to the 14th Amendment and also is in contravention
of the treaty between the United States and Italy, to which
latter country the plaintiff in error belongs .

Under the 14th Amendment the objection is twofold;


unjustifiably
depriving
the
alien
of
property,
and
discrimination against such aliens as a class. But the former
really depends upon the latter, since it hardly can be disputed
that if the lawful object, the protection of wild life (Geer vs.
Connecticut, 161 U.S., 519; 40 L. ed., 793; 16 Sup. Ct. Rep.,
600), warrants the discrimination, the, means adopted for
making it effective also might be adopted. . . .
The discrimination undoubtedly presents a more difficult
question. But we start with reference to the evil to be
prevented, and that if the class discriminated against is or
reasonably might be considered to define those from whom
the evil mainly is to be feared, it properly may be picked out.
A lack of abstract symmetry does not matter. The question is
a practical one, dependent upon experience. . . .
The question therefore narrows itself to whether this court can
say that the legislature of Pennsylvania was not warranted in
assuming as its premise for the law that resident
unnaturalized aliens were the peculiar source of the evil that it
desired to prevent. (Barrett vs. Indiana,. 229 U.S., 26, 29; 57
L. ed., 1050, 1052; 33 Sup. Ct. Rep., 692.)
Obviously the question, so stated, is one of local experience,
on which this court ought to be very slow to declare that the
state legislature was wrong in its facts (Adams vs. Milwaukee,
228 U.S., 572, 583; 57 L. ed., 971,.977; 33 Sup. Ct. Rep., 610.)
If we might trust popular speech in some states it was right;
but it is enough that this court has no such knowledge of local
conditions as to be able to say that it was manifestly wrong. . .
.
Judgment affirmed.
We are inclined to the view that while Smith, Bell & Co. Ltd., a
corporation having alien stockholders, is entitled to the
protection afforded by the due-process of law and equal
protection of the laws clause of the Philippine Bill of Rights,
nevertheless, Act No. 2761 of the Philippine Legislature, in
denying to corporations such as Smith, Bell &. Co. Ltd., the
right to register vessels in the Philippines coastwise trade,
does not belong to that vicious species of class legislation
which must always be condemned, but does fall within
authorized exceptions, notably, within the purview of the
police power, and so does not offend against the
constitutional provision.
This opinion might well be brought to a close at this point. It
occurs to us, however, that the legislative history of the
United States and the Philippine Islands, and, probably, the
legislative history of other countries, if we were to take the
time to search it out, might disclose similar attempts at
restriction on the right to enter the coastwise trade, and might
thus furnish valuable aid by which to ascertain and, if
possible, effectuate legislative intention.
3.
The power to regulate commerce, expressly
delegated to the Congress by the Constitution, includes the
power to nationalize ships built and owned in the United
States by registries and enrollments, and the recording of the
muniments of title of American vessels. The Congress "may
encourage or it may entirely prohibit such commerce, and it
may regulate in any way it may see fit between these two
extremes." (U.S. vs. Craig [1886], 28 Fed., 795; Gibbons vs.
Ogden [1824], 9 Wheat., 1; The Passenger Cases [1849], 7
How., 283.)

Acting within the purview of such power, the first Congress of


the United States had not been long convened before it
enacted on September 1, 1789, "An Act for Registering and
Clearing Vessels, Regulating the Coasting Trade, and for other
purposes." Section 1 of this law provided that for any ship or
vessel to obtain the benefits of American registry, it must
belong wholly to a citizen or citizens of the United States "and
no other." (1 Stat. at L., 55.) That Act was shortly after
repealed, but the same idea was carried into the Acts of
Congress of December 31, 1792 and February 18, 1793. (1
Stat. at L., 287, 305.).Section 4 of the Act of 1792 provided
that in order to obtain the registry of any vessel, an oath shall
be taken and subscribed by the owner, or by one of the
owners thereof, before the officer authorized to make such
registry, declaring, "that there is no subject or citizen of any
foreign prince or state, directly or indirectly, by way of trust,
confidence, or otherwise, interested in such vessel, or in the
profits or issues thereof." Section 32 of the Act of 1793 even
went so far as to say "that if any licensed ship or vessel shall
be transferred to any person who is not at the time of such
transfer a citizen of and resident within the United States, ...
every such vessel with her tackle, apparel, and furniture, and
the cargo found on board her, shall be forefeited." In case of
alienation to a foreigner, Chief Justice Marshall said that all
the privileges of an American bottom were ipso facto
forfeited. (U.S. vs. Willings and Francis [1807], 4 Cranch, 48.)
Even as late as 1873, the Attorney-General of the United
States was of the opinion that under the provisions of the Act
of December 31, 1792, no vessel in which a foreigner is
directly or indirectly interested can lawfully be registered as a
vessel of the United. States. (14 Op. Atty.-Gen. [U.S.], 340.)
These laws continued in force without contest, although
possibly the Act of March 3, 1825, may have affected them,
until amended by the Act of May 28, 1896 (29 Stat. at L., 188)
which extended the privileges of registry from vessels wholly
owned by a citizen or citizens of the United States to
corporations created under the laws of any of the states
thereof. The law, as amended, made possible the deduction
that a vessel belonging to a domestic corporation was entitled
to registry or enrollment even though some stock of the
company be owned by aliens. The right of ownership of stock
in a corporation was thereafter distinct from the right to hold
the property by the corporation (Humphreys vs. McKissock
[1890], 140 U.S., 304; Queen vs. Arnaud [1846], 9 Q. B., 806;
29 Op. Atty.-Gen. [U.S.],188.)
On American occupation of the Philippines, the new
government found a substantive law in operation in the
Islands with a civil law history which it wisely continued in
force Article fifteen of the Spanish Code of Commerce
permitted any foreigner to engage in Philippine trade if he had
legal capacity to do so under the laws of his nation. When the
Philippine Commission came to enact the Customs
Administrative Act (No. 355) in 1902, it returned to the old
American policy of limiting the protection and flag of the
United States to vessels owned by citizens of the United
States or by native inhabitants of the Philippine Islands (Sec.
117.) Two years later, the same body reverted to the existing
Congressional law by permitting certification to be issued to a
citizen of the United States or to a corporation or company
created under the laws of the United States or of any state
thereof or of the Philippine Islands (Act No. 1235, sec. 3.) The
two administration codes repeated the same provisions with
the necessary amplification of inclusion of citizens or native
inhabitants of the Philippine Islands (Adm. Code of 1916, sec.
1345; Adm. Code of 1917, sec. 1172). And now Act No. 2761

has returned to the restrictive idea of the original Customs


Administrative Act which in turn was merely a reflection of the
statutory language of the first American Congress.
Provisions such as those in Act No. 2761, which deny to
foreigners the right to a certificate of Philippine registry, are
thus found not to be as radical as a first reading would make
them appear.
Without any subterfuge, the apparent purpose of the
Philippine Legislature is seen to be to enact an anti-alien
shipping act. The ultimate purpose of the Legislature is to
encourage Philippine ship-building. This, without doubt, has,
likewise, been the intention of the United States Congress in
passing navigation or tariff laws on different occasions. The
object of such a law, the United States Supreme Court once
said, was to encourage American trade, navigation, and shipbuilding by giving American ship-owners exclusive privileges.
(Old Dominion Steamship Co. vs. Virginia [1905], 198 U.S.,
299; Kent's Commentaries, Vol. 3, p. 139.)
In the concurring opinion of Justice Johnson in Gibbons vs.
Ogden ([1824], 9 Wheat., 1) is found the following:
Licensing acts, in fact, in legislation, are universally
restraining acts; as, for example, acts licensing gaming
houses, retailers of spirituous liquors, etc. The act, in this
instance, is distinctly of that character, and forms part of an
extensive system, the object of which is to encourage
American shipping, and place them on an equal footing with
the shipping of other nations. Almost every commercial nation
reserves to its own subjects a monopoly of its coasting trade;
and a countervailing privilege in favor of American shipping is
contemplated, in the whole legislation of the United States on
this subject. It is not to give the vessel an American character,
that the license is granted; that effect has been correctly
attributed to the act of her enrollment. But it is to confer on
her American privileges, as contradistinguished from foreign;
and to preserve the. Government from fraud by foreigners, in
surreptitiously intruding themselves into the American
commercial marine, as well as frauds upon the revenue in the
trade coastwise, that this whole system is projected.
The United States Congress in assuming its grave
responsibility of legislating wisely for a new country did so
imbued with a spirit of Americanism. Domestic navigation and
trade, it decreed, could only be carried on by citizens of the
United States. If the representatives of the American people
acted in this patriotic manner to advance the national policy,
and if their action was accepted without protest in the courts,
who can say that they did not enact such beneficial laws
under the all-pervading police power, with the prime motive of
safeguarding the country and of promoting its prosperity?
Quite similarly, the Philippine Legislature made up entirely of
Filipinos, representing the mandate of the Filipino people and
the guardian of their rights, acting under practically
autonomous powers, and imbued with a strong sense of
Philippinism, has desired for these Islands safety from foreign
interlopers, the use of the common property exclusively by its
citizens and the citizens of the United States, and protection
for the common good of the people. Who can say, therefore,
especially can a court, that with all the facts and
circumstances affecting the Filipino people before it, the
Philippine Legislature has erred in the enactment of Act No.
2761?

Surely, the members of the judiciary are not expected to live


apart from active life, in monastic seclusion amidst dusty
tomes and ancient records, but, as keen spectators of passing
events and alive to the dictates of the general the national
welfare, can incline the scales of their decisions in favor of
that solution which will most effectively promote the public
policy. All the presumption is in favor of the constitutionally of
the law and without good and strong reasons, courts should
not attempt to nullify the action of the Legislature. "In
construing a statute enacted by the Philippine Commission
(Legislature), we deem it our duty not to give it a construction
which would be repugnant to an Act of Congress, if the
language of the statute is fairly susceptible of another
construction not in conflict with the higher law." (In re Guaria
[1913], 24. Phil., 36; U.S. vs. Ten Yu [1912], 24 Phil., 1.) That is
the true construction which will best carry legislative intention
into effect.

With full consciousness of the importance of the question, we


nevertheless are clearly of the opinion that the limitation of
domestic ownership for purposes of obtaining a certificate of
Philippine registry in the coastwise trade to citizens of the
Philippine Islands, and to citizens of the United States, does
not violate the provisions of paragraph 1 of section 3 of the
Act of Congress of August 29, 1916 No treaty right relied upon
Act No. 2761 of the Philippine Legislature is held valid and
constitutional .
The petition for a writ of mandamus is denied, with costs
against the petitioner. So ordered.

Facts:
-Smith, Bell & Co. is a corporation organized and existing
under the laws of the Philippine Islands;majority of the
stockholders are British; owner of a motor vessel known as
the Batobrought toCebu for the purpose of transporting
Smith, Bell & Co.s merchandise between ports in theislands
.-application for registration was made at Cebu at the
Collector of Customs---denied. Becausethey were not citizens
of the US/Phils
.-Act 2671, Sec. 1172. Certificate ofPhilippine Register.upon
registration of a vessel of domesticownership, and of more
than 15 tons gross, a certificate of Philippine register shall be
issued forit. If the vessel is of domestic ownership and of 15
tons gross or less, the taking of the certificateof Philippine
register shall be optional with the owner
-domestic ownership, as used in this section, means
ownership vested in the (a) citizens ornative inhabitants of the
Phil Islands; (b) citizens of the US residing in the Phil. Islands;
(c) anycorporation or company composed wholly of citizen of
Phils./US or both-plaintiffs contention: Act No. 2671 deprives
the corp. of its property without due process of lawbecause by
the passage of the law, the company was automatically
deprived of every beneficialattribute of ownership of the Bato
and that they are left with a naked title they could not use.
Issue: WON Smith, Bell & Co. were denied of the due process
of law by the Phil. Legislature in itsenactment of Act 2761.
Ruling: No. (judgment affirmedplaintiff cant be granted
registry.)RD: Act No. 2761, in denying to corporations such as
Smith, Bell & Co. Ltd., the right to registervessels in the Phils.
Coastwide trade, falls within the authorized exceptions.
Specifically withinthe purview of the police power. Literally
and absolutely, steamship lines are the arteries of
thecommerce in the Phils. If one be severed, the lifeblood of
the nation is lost. If these areprotected, security of the
country and general welfare is sustained.

Nunez vs. Averia, 57 SCRA 726)


Rubi and various other Manguianes (Mangyans) in the
province of Mindoro were ordered by the provincial governor
of Mindoro to remove their residence from their native habitat
and to established themselves on a reservation in Tigbao, still
in the province of Mindoro, and to remain there, or be
punished by imprisonment if they escaped. Manguianes had
been ordered to live in a reservation made to that end and for
purposes of cultivation under certain plans. The Manguianes
are a Non-Christian tribe who were considered to be of very
low culture.
One of the Manguianes, a certain Dabalos, escaped from the
reservation but was later caught and was placed in prison at
Calapan, solely because he escaped from the reservation. An
application for habeas corpus was made on behalf by Rubi
and other Manguianes of the province, alleging that by virtue
of the resolution of the provincial board of Mindoro creating
the reservation, they had been illegally deprived of their
liberty. In this case, the validity of Section 2145 of the
Administrative Code, which provides:
With the prior approval of the Department Head, the
provincial governor of any province in which non-Christian
inhabitants are found is authorized, when such a course is
deemed necessary in the interest of law and order, to direct
such inhabitants to take up their habitation on sites on
unoccupied public lands to be selected by him and approved
by the provincial board.
was challenged.

ISSUE: Whether or not Section 2145 of the Administrative


Code constitutes undue delegation. Whether or not the
Manguianes are being deprived of their liberty.
HELD:
I. No. By a vote of five to four, the Supreme Court sustained
the constitutionality of this section of the Administrative Code.
Under the doctrine of necessity, who else was in a better
position to determine whether or not to execute the law but
the provincial governor. It is optional for the provincial
governor to execute the law as circumstances may arise. It is
necessary to give discretion to the provincial governor. The
Legislature may make decisions of executive departments of
subordinate official thereof, to whom it has committed the
execution of certain acts, final on questions of fact.
II. No. Among other things, the term non-Christian should
not be given a literal meaning or a religious signification, but
that it was intended to relate to degrees of civilization. The
term non-Christian it was said, refers not to religious belief,
but in a way to geographical area, and more directly to
natives of the Philippine Islands of a low grade of civilization.
In this case, the Manguianes were being reconcentrated in the
reservation to promote peace and to arrest their seminomadic
lifestyle. This will ultimately settle them down where they can
adapt to the changing times.
The Supreme Court held that the resolution of the provincial
board of Mindoro was neither discriminatory nor class
legislation, and stated among other things: . . . one cannot
hold that the liberty of the citizen is unduly interfered with

when the degree of civilization of the Manguianes is


considered. They are restrained for their own good and the
general good of the Philippines. Nor can one say that due
process of law has not been followed. To go back to our
definition of due process of law and equal protection of the
laws, there exists a law; the law seems to be reasonable; it is
enforced according to the regular methods of procedure
prescribed; and it applies alike to all of a class.

Crespo vs. Provincial Board, 160


SCRA 66)
Facts:
Petitioner was the elected Municipal Mayor of Cabiao, Nueva
Ecija, in the local elections of 1967. On 25January 1971, an
administrative complaint was filed against him by private
respondent, Pedro T. Wycoco for harassment, abuse of
authority and oppression. As required, petitioner filed a
written explanation as to why he should not be dealt with
administratively, with the Provincial Board of Nueva Ecija, in
accordance with Section 5, Republic Act No. 5185.On 15
February 1971, without notifying petitioner or his counsel,
public respondent Provincial Board conducted a hearing of the
aforecited administrative case. During the hearing, private
respondent Pedro T. Wycoco was allowed to present evidence,
testimonial and documentary, ex parte, and on the basis of
the evidence presented, the respondent Provincial Board
passed Resolution No. 51preventively suspending petitioner
from his office as municipal mayor of Cabiao, Nueva Ecija.In
this petition for certiorari, prohibition and injunction with
prayer for preliminary injunction, petitioner seeks to annul
and set aside Resolution No. 51 of public respondent
Provincial Board, preventively suspending him from office and
to enjoin public respondent from enforcing and/or
implementing the order of preventive suspension and from
proceeding further with the administrative case. According to
petitioner, the order of preventive suspension embodied in
Resolution No.51 issued by the Provincial Board is arbitrary,
high-handed, atrocious, shocking and grossly violative of
Section5 of Republic Act No. 5185 which requires a hearing
and investigation of the truth or falsity of charges before
preventive suspension is allowed. In issuing the order of
preventive suspension, the respondent Provincial Board,
petitioner adds, has grossly violated the fundamental and
elementary principles of due process. On 3 May 1971, this
Court issued a preliminary injunction.
Issue:
Whether or not petitioner was denied due process?
Held:
Yes. In Callanta vs. Carnation Philippines, Inc.6 this Court held:
It is a principle in American jurisprudence which, undoubtedly,
is well-recognized in this jurisdiction that one's employment,
profession, trade or calling is a "property right and the
wrongful interference therewith is an actionable wrong. The
right is considered to be property within the protection of a
constitutional guaranty of due process of law. Undoubtedly,
the order of preventive suspension was issued without giving
the petitioner a chance to be heard. To controvert the claim of
petitioner that he was not fully notified of the scheduled
hearing, respondent Provincial Board, in its Memorandum,
contends that "Atty. Bernardo M. Abesamis, counsel for the

petitioner mayor made known by a request in writing, sent to


the Secretary of the Provincial Board his desire to be given
opportunity to argue the explanation of the said petitioner
mayor at the usual time of the respondent Board's meeting,
but unfortunately, inspire of the time allowed for the counsel
for the petitioner mayor to appear as requested by him, he
failed to appeal." The contention of the Provincial Board
cannot stand alone in the absence of proof or evidence to
support it. Moreover, in the proceedings held on 15 February
1971, nothing therein can be gathered that, in issuing the
assailed order, the written explanation submitted by petitioner
was taken in to account. The assailed order was issued mainly
on the basis of the evidence presented ex parte by
respondent Wycoco. In Azul vs. Castro, 9 this Court said: From
the earliest inception of institutional government in our
country, the concepts of notice and hearing have been
fundamental. A fair and enlightened system of justice would
be impossible without the right to notice and to be board. The
emphasis on substantive due process and other recent
ramifications of the due process clause sometimes leads
bench and bar to overlook or forget that due process was
initially concerned with fair procedure. Every law student early
learns in law school definition submitted by counsel Mr.
Webster in Trustees of Dartmouth College v. Woodward (4
Wheat. 518) that due process is the equivalent of law of the
land which means "The general law; a law which hears before
it condemns, which proceeding upon inquiry and renders
judgment only after trial ... that every citizen shall hold his
life, liberty, property, and immunities under the protection of
the general rules which govern society. As porting opportunity
to be heard and the rendition of judgment only after a lawful
hearing by a coldly neutral and impartial judge are essential
elements of procedural due process. The petition, however,
has become moot and academic. Records do not show that in
the last local elections held on18January 1988, petitioner was
elected to any public office

GSIS vs. Montesclaros, 434 SCRA


41

disqualifying her from receiving survivorship pension and that


she is no longer interested in pursuing the case.[10]
Commenting on Milagros letter, GSIS asserts that the Court
must decide the case on the merits.[11]

The Case
This is a petition for review on certiorari of the Decision[1]
dated 13 December 2000 of the Court of Appeals in CA-G.R.
CV No. 48784. The Court of Appeals affirmed the Decision[2]
of the Regional Trial Court, Branch 21, Cebu City (trial court),
which held that Milagros Orbiso Montesclaros is entitled to
survivorship pension.
The Facts
Sangguniang Bayan member Nicolas Montesclaros (Nicolas)
married Milagros Orbiso (Milagros) on 10 July 1983.[3] Nicolas
was a 72- year old widower when he married Milagros who
was then 43 years old.
On 4 January 1985, Nicolas filed with the Government Service
Insurance System (GSIS) an application for retirement benefits
effective 18 February 1985 under Presidential Decree No.
1146 or the Revised Government Service Insurance Act of
1977 (PD 1146). In his retirement application, Nicolas
designated his wife Milagros as his sole beneficiary.[4] Nicolas
last day of actual service was on 17 February 1985.[5] On 31
January 1986, GSIS approved Nicolas application for
retirement effective 17 February 1984, granting a lump sum
payment of annuity for the first five years and a monthly
annuity thereafter.[6] Nicolas died on 22 April 1992. Milagros
filed with GSIS a claim for survivorship pension under PD
1146. On 8 June 1992, GSIS denied the claim because under
Section 18 of PD 1146, the surviving spouse has no right to
survivorship pension if the surviving spouse contracted the
marriage with the pensioner within three years before the
pensioner qualified for the pension.[7] According to GSIS,
Nicolas wed Milagros on 10 July 1983, less than one year from
his date of retirement on 17 February 1984.
On 2 October 1992, Milagros filed with the trial court a special
civil action for declaratory relief questioning the validity of
Section 18 of PD 1146 disqualifying her from receiving
survivorship pension.
On 9 November 1994, the trial court rendered judgment
declaring Milagros eligible for survivorship pension. The trial
court ordered GSIS to pay Milagros the benefits due including
interest. Citing Articles 115[8] and 117[9] of the Family Code,
the trial court held that retirement benefits, which the
pensioner has earned for services rendered and for which the
pensioner has contributed through monthly salary deductions,
are onerous acquisitions. Since retirement benefits are
property the pensioner acquired through labor, such benefits
are conjugal property. The trial court held that the prohibition
in Section 18 of PD 1146 is deemed repealed for being
inconsistent with the Family Code, a later law. The Family
Code has retroactive effect if it does not prejudice or impair
vested rights.
GSIS appealed to the Court of Appeals, which affirmed the
decision of the trial court. Hence, this petition for review.

In the meantime, in a letter dated 10 January 2003, Milagros


informed the Court that she has accepted GSIS decision

The Court will resolve the issue despite the manifestation of


Milagros. The issue involves not only the claim of Milagros but
also that of other surviving spouses who are similarly situated
and whose claims GSIS would also deny based on the proviso.
Social justice and public interest demand that we resolve the
constitutionality of the proviso.
The Ruling of the Court of Appeals
The Court of Appeals agreed with the trial court that the
retirement benefits are onerous and conjugal because the
pension came from the deceased pensioners salary
deductions. The Court of Appeals held that the pension is not
gratuitous since it is a deferred compensation for services
rendered.
The Issues
GSIS raises the following issues:
1. Whether Section 16 of PD 1146 entitles Milagros to
survivorship pension;
2. Whether retirement benefits form part of conjugal property;
3. Whether Articles 254 and 256 of the Family Code repealed
Section 18 of PD 1146.[12]
The Courts Ruling
The pertinent provisions of PD 1146 on survivorship benefits
read:
SEC. 16. Survivorship Benefits. When a member or pensioner
dies, the beneficiary shall be entitled to survivorship benefits
provided for in sections seventeen and eighteen hereunder.
The survivorship pension shall consist of:
(1) basic survivorship pension which is fifty percent of the
basic monthly pension; and
(2) dependents pension not exceeding fifty percent of the
basic monthly pension payable in accordance with the rules
and regulations prescribed by the System.
SEC. 17. Death of a Member. (a) Upon the death of a member,
the primary beneficiaries shall be entitled to:
(1) the basic monthly pension which is guaranteed for five
years; Provided, That, at the option of the beneficiaries, it may
be paid in lump sum as defined in this Act: Provided, further,
That, the member is entitled to old-age pension at the time of
his death; or
(2) the basic survivorship pension which is guaranteed for
thirty months and the dependents pension; Provided, That,
the deceased had paid at least thirty-six monthly
contributions within the five-year period immediately
preceding his death, or a total of at least one hundred eighty
monthly contributions prior to his death.

(b) At the end of the guaranteed periods mentioned in the


preceding sub-section (a), the survivorship pension shall be
paid as follows:
(1) when the dependent spouse is the only survivor, he shall
receive the basic survivorship pension for life or until he
remarries;
(2) when only dependent children are the survivors, they shall
be entitled to the survivorship pension for as long as they are
qualified;
(3) when the survivors are the dependent spouse and the
dependent children, they shall be entitled to the survivorship
pension so long as there are dependent children and,
thereafter, the surviving spouse shall receive the basic
survivorship pension for life or until he remarries.
(c) In the absence of primary beneficiaries, the secondary
beneficiaries designated by the deceased and recorded in the
System, shall be entitled to:
(1) a cash payment equivalent to thirty times the basic
survivorship pension when the member is qualified for old-age
pension; or
(2) a cash payment equivalent to fifty percent of the average
monthly compensation for each year he paid contributions,
but not less than five hundred pesos; Provided, That, the
member paid at least thirty-six monthly contributions within
the five-year period immediately preceding his death or paid a
total of at least one hundred eighty monthly contributions
prior to his death.
(d) When the primary beneficiaries are not entitled to the
benefits mentioned in paragraph (a) of this section, they shall
receive a cash payment equivalent to one hundred percent of
the average monthly compensation for each year the member
paid contributions, but not less than five hundred pesos. In
the absence of primary beneficiaries, the amount shall revert
to the funds of the System.
SEC. 18. Death of a Pensioner. Upon the death of a pensioner,
the primary beneficiaries shall receive the applicable pension
mentioned under paragraph (b) of section seventeen of this
Act: Provided, That, the dependent spouse shall not be
entitled to said pension if his marriage with the pensioner is
contracted within three years before the pensioner qualified
for the pension. When the pensioner dies within the period
covered by the lump sum, the survivorship pension shall be
paid only after the expiration of the said period. This shall also
apply to the pensioners living as of the effectivity of this Act,
but the survivorship benefit shall be based on the monthly
pension being received at the time of death. (Emphasis
supplied)
Under PD 1146, the primary beneficiaries are (1) the
dependent spouse until such spouse remarries, and (2) the
dependent children.[13] The secondary beneficiaries are the
dependent parents and legitimate descendants except
dependent children.[14] The law defines dependent as the
legitimate, legitimated, legally adopted, acknowledged
natural or illegitimate child who is unmarried, not gainfully
employed, and not over twenty-one years of age or is over
twenty-one years of age but physically or mentally
incapacitated and incapable of self-support. The term also
includes the legitimate spouse dependent for support on the

member, and the legitimate parent wholly dependent on the


member for support.[15]
The main question for resolution is the validity of the proviso
in Section 18 of PD 1146, which proviso prohibits the
dependent spouse from receiving survivorship pension if such
dependent spouse married the pensioner within three years
before the pensioner qualified for the pension (the proviso).
We hold that the proviso, which was the sole basis for the
rejection by GSIS of Milagros claim, is unconstitutional
because it violates the due process clause. The proviso is also
discriminatory and denies equal protection of the law.
Retirement Benefits as Property Interest
Under Section 5 of PD 1146, it is mandatory for the
government employee to pay monthly contributions. PD 1146
mandates the government to include in its annual
appropriation the necessary amounts for its share of the
contributions. It is compulsory on the government employer to
take off and withhold from the employees monthly salaries
their contributions and to remit the same to GSIS.[16] The
government employer must also remit its corresponding share
to GSIS.[17] Considering the mandatory salary deductions
from the government employee, the government pensions do
not constitute mere gratuity but form part of compensation.
In a pension plan where employee participation is mandatory,
the prevailing view is that employees have contractual or
vested rights in the pension where the pension is part of the
terms of employment.[18] The reason for providing retirement
benefits is to compensate service to the government.
Retirement benefits to government employees are part of
emolument to encourage and retain qualified employees in
the government service. Retirement benefits to government
employees reward them for giving the best years of their lives
in the service of their country.[19]
Thus, where the employee retires and meets the eligibility
requirements, he acquires a vested right to benefits that is
protected by the due process clause.[20] Retirees enjoy a
protected property interest whenever they acquire a right to
immediate payment under pre-existing law.[21] Thus, a
pensioner acquires a vested right to benefits that have
become due as provided under the terms of the public
employees pension statute.[22] No law can deprive such
person of his pension rights without due process of law, that
is, without notice and opportunity to be heard.[23]
In addition to retirement and disability benefits, PD 1146 also
provides for benefits to survivors of deceased government
employees and pensioners. Under PD 1146, the dependent
spouse is one of the beneficiaries of survivorship benefits. A
widows right to receive pension following the demise of her
husband is also part of the husbands contractual
compensation.[24]
Denial of Due Process
The proviso is contrary to Section 1, Article III of the
Constitution, which provides that [n]o person shall be
deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of
the laws. The proviso is unduly oppressive in outrightly
denying a dependent spouses claim for survivorship pension if
the dependent spouse contracted marriage to the pensioner

within the three-year prohibited period. There is outright


confiscation of benefits due the surviving spouse without
giving the surviving spouse an opportunity to be heard. The
proviso undermines the purpose of PD 1146, which is to
assure comprehensive and integrated social security and
insurance benefits to government employees and their
dependents in the event of sickness, disability, death, and
retirement of the government employees.

c. to expand, increase, and improve the social security and


insurance benefits made available to him and his dependents
such as:

The whereas clauses of PD 1146 state:

The law extends survivorship benefits to the surviving and


qualified beneficiaries of the deceased member or pensioner
to cushion the beneficiaries against the adverse economic
effects resulting from the death of the wage earner or
pensioner.[26]

WHEREAS, the Government Service Insurance System in


promoting the efficiency and welfare of the employees of the
Government of the Philippines, administers the laws that
grant to its members social security and insurance benefits;

increasing pension benefits expanding disability benefits


introducing survivorship benefits introducing sickness income
benefits extending compulsory membership to all government
employees irrespective of status[25]

Violation of the Equal Protection Clause


WHEREAS, it is necessary to preserve at all times the actuarial
solvency of the funds administered by the System; to
guarantee to the government employee all the benefits due
him; and to expand and increase the benefits made available
to him and his dependents to the extent permitted by
available resources;

WHEREAS, provisions of existing laws have impeded the


efficient and effective discharge by the System of its functions
and have unduly hampered the System from being more
responsive to the dramatic changes of the times and from
meeting the increasing needs and expectations of the Filipino
public servant;

WHEREAS, provisions of existing laws that have prejudiced,


rather than benefited, the government employee; restricted,
rather than broadened, his benefits, prolonged, rather than
facilitated the payment of benefits, must now yield to his
paramount welfare;
WHEREAS, the social security and insurance benefits of
government employees must be continuously re-examined
and improved to assure comprehensive and integrated social
security and insurance programs that will provide benefits
responsive to their needs and those of their dependents in the
event of sickness, disability, death, retirement, and other
contingencies; and to serve as a fitting reward for dedicated
public service;
WHEREAS, in the light of existing economic conditions
affecting the welfare of government employees, there is a
need to expand and improve the social security and insurance
programs administered by the Government Service Insurance
System, specifically, among others, by increasing pension
benefits,
expanding
disability
benefits,
introducing
survivorship benefits, introducing sickness and income
benefits, and eventually extending the compulsory coverage
of these programs to all government employees regardless of
employment status.
PD 1146 has the following purposes:
a. to preserve at all times the actuarial solvency of the funds
administered by the System;
b. to guarantee to the government employee all the benefits
due him; and

The surviving spouse of a government employee is entitled to


receive survivors benefits under a pension system. However,
statutes sometimes require that the spouse should have
married the employee for a certain period before the
employees death to prevent sham marriages contracted for
monetary gain. One example is the Illinois Pension Code which
restricts survivors annuity benefits to a surviving spouse who
was married to a state employee for at least one year before
the employees death. The Illinois pension system classifies
spouses into those married less than one year before a
members death and those married one year or more. The
classification seeks to prevent conscious adverse risk
selection of deathbed marriages where a terminally ill
member of the pension system marries another so that
person becomes eligible for benefits. In Sneddon v. The State
Employees Retirement System of Illinois,[27] the Appellate
Court of Illinois held that such classification was based on
difference in situation and circumstance, bore a rational
relation to the purpose of the statute, and was therefore not in
violation of constitutional guarantees of due process and
equal protection.
A statute based on reasonable classification does not violate
the constitutional guaranty of the equal protection of the law.
[28] The requirements for a valid and reasonable classification
are: (1) it must rest on substantial distinctions; (2) it must be
germane to the purpose of the law; (3) it must not be limited
to existing conditions only; and (4) it must apply equally to all
members of the same class.[29] Thus, the law may treat and
regulate one class differently from another class provided
there are real and substantial differences to distinguish one
class from another.[30]
The proviso in question does not satisfy these requirements.
The proviso discriminates against the dependent spouse who
contracts marriage to the pensioner within three years before
the pensioner qualified for the pension.[31] Under the proviso,
even if the dependent spouse married the pensioner more
than three years before the pensioners death, the dependent
spouse would still not receive survivorship pension if the
marriage took place within three years before the pensioner
qualified for pension. The object of the prohibition is vague.
There is no reasonable connection between the means
employed and the purpose intended. The law itself does not
provide any reason or purpose for such a prohibition. If the
purpose of the proviso is to prevent deathbed marriages, then
we do not see why the proviso reckons the three-year
prohibition from the date the pensioner qualified for pension
and not from the date the pensioner died. The classification
does not rest on substantial distinctions. Worse, the

classification lumps all those marriages contracted within


three years before the pensioner qualified for pension as
having been contracted primarily for financial convenience to
avail of pension benefits.

Indeed, the classification is discriminatory and arbitrary. This


is probably the reason Congress deleted the proviso in
Republic Act No. 8291 (RA 8291),[32] otherwise known as the
Government Service Insurance Act of 1997, the law revising
the old charter of GSIS (PD 1146). Under the implementing
rules of RA 8291, the surviving spouse who married the
member immediately before the members death is still
qualified to receive survivorship pension unless the GSIS
proves that the surviving spouse contracted the marriage
solely to receive the benefit.[33]
Thus, the present GSIS law does not presume that marriages
contracted within three years before retirement or death of a
member are sham marriages contracted to avail of
survivorship benefits. The present GSIS law does not
automatically forfeit the survivorship pension of the surviving
spouse who contracted marriage to a GSIS member within
three years before the members retirement or death. The law
acknowledges that whether the surviving spouse contracted
the marriage mainly to receive survivorship benefits is a
matter of evidence. The law no longer prescribes a sweeping
classification that unduly prejudices the legitimate surviving
spouse and defeats the purpose for which Congress enacted
the social legislation.
WHEREFORE, the petition is DENIED for want of merit. We
declare VOID for being violative of the constitutional
guarantees of due process and equal protection of the law the
proviso in Section 18 of Presidential Decree No. 1146, which
proviso states that the dependent spouse shall not be entitled
to said pension if his marriage with the pensioner is
contracted within three years before the pensioner qualified
for the pension. The Government Service Insurance System
cannot deny the claim of Milagros O. Montesclaros for
survivorship benefits based on this invalid proviso.
No pronouncement as to costs.
SO ORDERED.

protection. A proviso requiring certain number of years of


togetherness in marriage before the employees death is valid
to prevent sham marriages contracted for monetary gains.
Here, it is 3 years before pensioner qualified for the pension.
Under this, even if the dependent spouse married the
pensioner more than 3 years before the pensioners death,
the dependent spouse would still not receive survivorship
pension if the marriage took place within 3 years before the
pensioner qualified for pension. The object of prohibition is
vague. There is no reasonable connection between the means
employed and the purpose intended.

Kwong Sing vs. City of Manila, 41


Phil 103
Facts: Kwong Sing, in his own behalf and of other Chinese
laundrymen who has general and the same interest, filed a
complaint for a preliminary injunction. The Plaintiffs also
questioned the validity of enforcing Ordinance No. 532 by the
city of Manila. Ordinance No. 532 requires that the receipt be
in duplicate in English and Spanish duly signed showing the
kind and number of articles delivered by laundries and dyeing
and cleaning establishments. The permanent injunction was
denied by the trial court. The appellants claim is that
Ordinance No. 532 savors of class legislation; putting in mind
that they are Chinese nationals. It unjustly discriminates
between persons in similar circumstances; and that it
constitutes an arbitrary infringement of property rights. They
also contest that the enforcement of the legislation is an act
beyond the scope of their police power. In view of the
foregoing, this is an appeal with the Supreme Court.
Issues:
(1) Whether or Not the enforcement of Ordinance no, 532 is
an act beyond the scope of police power
(2) Whether or Not the enforcement of the same is a class
legislation that infringes property rights.
Held: Reasonable restraints of a lawful business for such
purposes are permissible under the police power. The police
power of the City of Manila to enact Ordinance No. 532 is
based on Section 2444, paragraphs (l) and (ee) of the
Administrative Code, as amended by Act No. 2744, authorizes
the municipal board of the city of Manila, with the approval of
the mayor of the city:
(l) To regulate and fix the amount of the license fees for the
following: xxxx xxxxxlaundries xxxx.

Milagros assail unconstitutionality of section 18 PD 1146 being


violative of due process and equal protection clause. When
her husband died, she filed in GSIS for claim for survivorship
pension. GSIS denied claim, it said surviving spouse has no
right of survivorship pension if the surviving spouse
contracted the marriage with the pensioner within three years
before the pensioner qualified for the pension.
HELD: There is denial of due process when it outrightly denies
the claim for survivorship. There is outright confiscation of
benefits due the surviving spouse without giving her an
opportunity to be heard. There is also violation of equal

(ee) To enact all ordinances it may deem necessary and


proper for the sanitation and safety, the furtherance of the
prosperity, and the promotion of the morality, peace, good
order, comfort, convenience, and general welfare of the city
and its inhabitants.
The court held that the obvious purpose of Ordinance No. 532
was to avoid disputes between laundrymen and their patrons
and to protect customers of laundries who are not able to
decipher Chinese characters from being defrauded.
(Considering that in the year 1920s, people of Manila are
more familiar with Spanish and maybe English.)

In whether the ordinance is class legislation, the court held


that the ordinance invades no fundamental right, and impairs
no personal privilege. Under the guise of police regulation, an
attempt is not made to violate personal property rights. The
ordinance is neither discriminatory nor unreasonable in its
operation. It applies to all public laundries without distinction,
whether they belong to Americans, Filipinos, Chinese, or any
other nationality. All, without exception, and each every one of
them without distinction, must comply with the ordinance. The
obvious objection for the implementation of the ordinance is
based in sec2444 (ee) of the Administrative Code. Although,
an additional burden will be imposed on the business and
occupation affected by the ordinance such as that of the
appellant by learning even a few words in Spanish or English,
but mostly Arabic numbers in order to properly issue a
receipt, it seems that the same burdens are cast upon the
them. Yet, even if private rights of person or property are
subjected to restraint, and even if loss will result to individuals
from the enforcement of the ordinance, this is not sufficient
ground for failing to uphold the power of the legislative body.
The very foundation of the police power is the control of
private interests for the public welfare.
Finding that the ordinance is valid, judgment is affirmed, and
the petition for a preliminary injunction is denied, with costs
against the appellants.

Ichong vs. Hernandez, 101 Phil


1155
Facts: Petitioner, for and in his own behalf and on behalf of
other alien residents corporations and partnerships adversely
affected by the provisions of Republic Act. No. 1180, An Act
to Regulate the Retail Business, filed to obtain a judicial
declaration that said Act is unconstitutional contending that:
(1) it denies to alien residents the equal protection of the laws
and deprives of their liberty and property without due process
of law ; (2) the subject of the Act is not expressed or
comprehended in the title thereof; (3) the Act violates
international and treaty obligations of the Republic of the
Philippines; (4) the provisions of the Act against the
transmission by aliens of their retail business thru hereditary
succession, and those requiring 100% Filipino capitalization
for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and
Section 8 of Article XIV of the Constitution.

Issue: Whether RA 1180 denies to alien residents the equal


protection of the laws and deprives of their liberty and
property without due process of law

Held: No. The equal protection of the law clause is against


undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not
intended to prohibit legislation, which is limited either in the
object to which it is directed or by territory within which is to
operate. It does not demand absolute equality among
residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to
privileges conferred and liabilities enforced. The equal
protection clause is not infringed by legislation which applies
only to those persons falling within a specified class, if it
applies alike to all persons within such class, and reasonable
grounds exists for making a distinction between those who fall
within such class and those who do not. (2 Cooley,
Constitutional Limitations, 824-825.)

The due process clause has to do with the reasonableness of


legislation enacted in pursuance of the police power. Is there
public interest, a public purpose; is public welfare involved? Is
the Act reasonably necessary for the accomplishment of the
legislatures purpose; is it not unreasonable, arbitrary or
oppressive? Is there sufficient foundation or reason in
connection with the matter involved; or has there not been a
capricious use of the legislative power? Can the aims
conceived be achieved by the means used, or is it not merely
an unjustified interference with private interest? These are the
questions that we ask when the due process test is applied.

The conflict, therefore, between police power and the


guarantees of due process and equal protection of the laws is
more apparent than real. Properly related, the power and the
guarantees are supposed to coexist. The balancing is the
essence or, shall it be said, the indispensable means for the
attainment of legitimate aspirations of any democratic society.

There can be no absolute power, whoever exercise it, for that


would be tyranny. Yet there can neither be absolute liberty, for
that would mean license and anarchy. So the State can
deprive persons of life, liberty and property, provided there is
due process of law; and persons may be classified into classes
and groups, provided everyone is given the equal protection
of the law. The test or standard, as always, is reason. The
police power legislation must be firmly grounded on public
interest and welfare, and a reasonable relation must exist
between purposes and means. And if distinction and
classification has been made, there must be a reasonable
basis for said distinction.

The law does not violate the equal protection clause of the
Constitution because sufficient grounds exist for the
distinction between alien and citizen in the exercise of the
occupation regulated, nor the due process of law clause,
because the law is prospective in operation and recognizes
the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and
efficacy of the law to carry out its objectives appear to us to
be plainly evident as a matter of fact it seems not only
appropriate but actually necessary and that in any case
such matter falls within the prerogative of the Legislature,
with whose power and discretion the Judicial department of
the Government may not interfere; that the provisions of the
law are clearly embraced in the title, and this suffers from no
duplicity and has not misled the legislators or the segment of
the population affected; and that it cannot be said to be void
for supposed conflict with treaty obligations because no treaty
has actually been entered into on the subject and the police
power may not be curtailed or surrendered by any treaty or
any other conventional agreement.

Banco Espanol vs. Palanca, 37 Phil


921
FACTS: Engracio Palanca was indebted to El Banco and he had
his parcel of land as security to his debt. His debt amounted
to P218,294.10. His property is worth 75k more than what he
owe. Due to the failure of Engracio to make his payments, El
Banco executed an Instrument to mortgage Engracios
property. Engracio however left for China and he never
returned til he died. Since Engracio is a non resident El Banco
has to notify Engracio about their intent to sue him by means
of publication using a newspaper. The lower court further
orderdd the clerk of court to furnish Engracio a copy and that
itd be sent to Amoy, China. The court eventually granted El
Banco petition to execute Engracios property. 7 years
thereafter, Vicente surfaced on behalf of Engracio as his
administrator to petition for the annulment of the ruling.
Vicente averred that there had been no due process as
Engracio never received the summons.
ISSUE: Whether or not due process was not observed.
HELD: The SC ruled against Palanca. The SC ruled that the
requisites for judicial due process had been met.
The requisites are; 1.There must be an impartial court or
tribunal clothed with judicial power to hear and decide the
matter before it. 2.Jurisdiction must be lawfully acquired over
the person of the defendant or over the property subject of
the
proceedings. 3. The defendant must be given the
opportunity to be heard. 4. Judgment must be rendered only
after lawful hearing
* JURISDICTION, HOW ACQUIRED: Jurisdiction over the
property which is the subject of the litigation may result either
from a seizure of the property under legal process, whereby it
is brought into the actual custody of the law, or it may result
from the institution of legal proceedings wherein, under
special provisions of law, the power of the court over the
property is recognized and made effective.
* The action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed the idea that
while it is not strictly speaking an action in rem yet it partakes
of that nature and is substantially such.
* DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property is
always assumed to be in the possession of its owner, in
person or by agent; and he may be safely held, under certain
conditions, to be affected with knowledge that proceedings
have been instituted for its condemnation and sale.
FACTS:
Engracio Palanca Tanquinyeng y Limquingco mortgaged
various parcels of real property in Manila to El Banco EspanolFilipino. Afterwards, Engracio returned to China and there he
died on January 29, 1810 without returning again to the
Philippines. The mortgagor then instituted foreclosure
proceeding but since defendant is a non-resident, it was
necessary to give notice by publication. The Clerk of Court
was also directed to send copy of the summons to the
defendants last known address, which is in Amoy, China. It is
not shown whether the Clerk complied with this requirement.
Nevertheless, after publication in a newspaper of the City of
Manila, the cause proceeded and judgment by default was

rendered. The decision was likewise published and afterwards


sale by public auction was held with the bank as the highest
bidder. On August 7, 1908, this sale was confirmed by the
court. However, about seven years after the confirmation of
this sale, a motion was made by Vicente Palanca, as
administrator of the estate of the original defendant, wherein
the applicant requested the court to set aside the order of
default and the judgment, and to vacate all the proceedings
subsequent thereto. The basis of this application was that the
order of default and the judgment rendered thereon were void
because the court had never acquired jurisdiction over the
defendant or over the subject of the action.
ISSUE:
* Whether or not the lower court acquired jurisdiction over the
defendant and the subject matter of the action * Whether or
not due process of law was observed
RULING:
On Jurisdiction --- The word jurisdiction is used in several
different, though related, senses since it may have reference
(1) to the authority of the court to entertain a particular kind
of action or to administer a particular kind of relief, or it may
refer to the power of the court over the parties, or (2) over the
property which is the subject to the litigation.
The sovereign authority which organizes a court determines
the nature and extent of its powers in general and thus fixes
its competency or jurisdiction with reference to the actions
which it may entertain and the relief it may grant.
How Jurisdiction is Acquired --- Jurisdiction over the person is
acquired by the voluntary appearance of a party in court and
his submission to its authority, or it is acquired by the
coercive power of legal process exerted over the person.
Jurisdiction over the property which is the subject of the
litigation may result either from a seizure of the property
under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of legal
proceedings wherein, under special provisions of law, the
power of the court over the property is recognized and made
effective. In the latter case the property, though at all times
within the potential power of the court, may never be taken
into actual custody at all. An illustration of the jurisdiction
acquired by actual seizure is found in attachment
proceedings, where the property is seized at the beginning of
the action, or some subsequent stage of its progress, and held
to abide the final event of the litigation. An illustration of what
we term potential jurisdiction over the res, is found in the
proceeding to register the title of land under our system for
the registration of land. Here the court, without taking actual
physical control over the property assumes, at the instance of
some person claiming to be owner, to exercise a jurisdiction in
rem over the property and to adjudicate the title in favor of
the petitioner against all the world.
In the terminology of American law the action to foreclose a
mortgage is said to be a proceeding quasi in rem, by which is
expressed the idea that while it is not strictly speaking an
action in rem yet it partakes of that nature and is substantially
such. The expression "action in rem" is, in its narrow
application, used only with reference to certain proceedings in
courts of admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the

proceedings are based. The action quasi rem differs from the
true action in rem in the circumstance that in the former an
individual is named as defendant, and the purpose of the
proceeding is to subject his interest therein to the obligation
or lien burdening the property. All proceedings having for their
sole object the sale or other disposition of the property of the
defendant, whether by attachment, foreclosure, or other form
of remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive only
between the parties.
It is true that in proceedings of this character, if the defendant
for whom publication is made appears, the action becomes as
to him a personal action and is conducted as such. This,
however, does not affect the proposition that where the
defendant fails to appear the action is quasi in rem; and it
should therefore be considered with reference to the
principles governing actions in rem.

Ang Tibay vs. CIR, 60 Phil 635


Teodoro Toribio owns and operates Ang Tibay, a leather
company which supplies the Philippine Army. Due to alleged
shortage of leather, Toribio caused the lay off of a number of
his employees. However, the National Labor Union, Inc. (NLU)
questioned the validity of said lay off as it averred that the
said employees laid off were members of NLU while no
members of the rival labor union (National Workers
Brotherhood) were laid off. NLU claims that NWB is a company
dominated union and Toribio was merely busting NLU. The
case reached the Court of Industrial Relations (CIR) where
Toribio and NWB won. Eventually, NLU went to the Supreme
Court invoking its right for a new trial on the ground of newly
discovered evidence. The Supreme Court agreed with NLU.
The Solicitor General, arguing for the CIR, filed a motion for
reconsideration.
ISSUE: Whether or not the National Labor Union, Inc. is
entitled to a new trial.
HELD: Yes. The records show that the newly discovered
evidence or documents obtained by NLU, which they attached
to their petition with the SC, were evidence so inaccessible to
them at the time of the trial that even with the exercise of due
diligence they could not be expected to have obtained them
and offered as evidence in the Court of Industrial Relations.
Further, the attached documents and exhibits are of such farreaching importance and effect that their admission would
necessarily mean the modification and reversal of the
judgment rendered (said newly obtained records include
books of business/inventory accounts by Ang Tibay which
were not previously accessible but already existing).
The SC also outlined that administrative bodies, like the CIR,
although not strictly bound by the Rules of Court must also
make sure that they comply to the requirements of due
process. For administrative bodies, due process can be
complied with by observing the following:
(1)
The right to a hearing which includes the right of the
party interested or affected to present his own case and
submit evidence in support thereof.
(2)
Not only must the party be given an opportunity to
present his case and to adduce evidence tending to establish
the rights which he asserts but the tribunal must consider the
evidence presented.

(3)
While the duty to deliberate does not impose the
obligation to decide right, it does imply a necessity which
cannot be disregarded, namely, that of having something to
support its decision. A decision with absolutely nothing to
support it is a nullity, a place when directly attached.
(4)
Not only must there be some evidence to support a
finding or conclusion but the evidence must be substantial.
Substantial evidence is more than a mere scintilla It means
such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.
(5)
The decision must be rendered on the evidence
presented at the hearing, or at least contained in the record
and disclosed to the parties affected.
(6)
The administrative body or any of its judges, therefore,
must act on its or his own independent consideration of the
law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision.
(7)
The administrative body should, in all controversial
questions, render its decision in such a manner that the
parties to the proceeding can know the various issues
involved, and the reasons for the decisions rendered. The
performance of this duty is inseparable from the authority
conferred upon it.